Cooke v. Smith.

to him had never been executed. There was neither purchase or payment in the transaction.

I do not think that the principle decided in Parmelee v. Egan, (7 Paige, 610,) is applicable. The facts in that case seem to be defectively stated by the reporter; but the point decided was, that a judgment creditor who had not issued an execution, was not in a condition to attack a fraudulent sale of goods liable to execution. Parmelee, who had issued an execution, while the goods were still in the hands of the fraudulent purchaser, was held entitled to be paid, in preference to the bona fide assignee for the benefit of other creditors. It was not decided in that case, that if the other judgment creditors had issued executions and had them returned unsatisfied before the filing of the bill, they would not have been entitled to the same preference as Parmelee received.

I think it should be so on principle; and that a creditor, who by his judgment in respect of real estate, his execution issued as to movables, and his execution returned as to things in action, is entitled to file a bill to set aside a fraudulent conveyance, sale or assignment; may follow the proceeds of the property transferred, into the hands of any number of intermediate assignees, and until the property or its proceeds, lodge in the hands of a bona fide creditor who has received and applied it upon his debt, or of a bona fide purchaser without notice of the fraud.

The complainant is not proved to have acquiesced in the sale to Gray, in any such manner as to preclude him from impeaching it on the ground of fraud.

As to the assignment to Mr. Benedict, the avoidance of the sale of the goods by S. C. Smith, does not render it fraudulent. Its effect is to withdraw from the assignee, so much of the assets as came from that sale, either directly or indirectly. He is entitled to be protected in the payments made by him before the bill was filed, and to receive his costs out of the fund.

As to Mr. Browning, if the unapplied fund in his hands, arose from the goods in question, it is liable to the complainant's demand, so far it is requisite to discharge the latter.

The complainant is entitled to a decree accordingly, for his debt, interest and costs.

The Farmers Loan and Trust Company v. Perry.

THE FARMERS LOAN AND TRUST COMPANY V. PERRY and others.

A corporation was created by a statute, with power to make life and fire insurances, grant annuities, and to make loans and invest its capital on bonds and mortgages; and the last section declared that the act should expire at the end of fifteen years, except as to insurances on lives, and the granting of annuities. By a subsequent statute, passed at the same session, the corporation was authorized to receive property of all kinds in trust, and to execute trusts in the same manner and to the same extent, as any trustees could lawfully do; and the corporation was directed to convert trust property and invest the same in stocks, or in bonds and mortgages. It also provided for a large increase of the capital stock of the company. A statute passed fourteen years afterwards, classified the directors, and limited the amount of its trusts, to five millions of dollars. Neither of the acts subsequent to the first, contained any limitation as to time.-Held, that the charter was perpetual. That the limitation to fifteen years, did not apply to the life insurance, annuity, or trust powers, conferred on the company. And that it had the power to loan money on bond and mortgage, after the fifteen years expired.

In respect of either of the three principal purposes for which the corporation existed, it was authorized to loan money on bond and mortgage.

It is not incumbent on a corporation enforcing a bond and mortgage, to show that it arose from some of its lawful pursuits.

The charter of a corporation prohibited its taking mortgages payable in a shorter time than one year, and the interest to be payable annually. On making a loan in July, the mortgage bore date eighteen days before the money was advanced, and by its terms was payable in one year from date, with interest to be paid yearly, on the first day of November in each year.-Held, that the mortgage was valid. The money could not be collected in less than a year from the date of the loan, that being the delivery and so the date of the mortgage.

Held also, that the statute regulating the time of payment, is to be deemed a part of the contract.

Held also, as to the interest, that the words "first day of November," should be rejected as surplusage, so as to give effect to the word "yearly," and thus render the mortgage operative.

Where a party setting up the defence of usury, alleged that certain bonds or evidences of debt, were advanced by the lender, and the proof showed that he advanced cash, the variance was held fatal.

December 18, 1845; March 14, 1846.

THIS was a bill to foreclose two mortgages executed by P. H. Perry and wife to the complainants, for securing $9000; one

The Farmers Loan and Trust Company v. Perry.

on lands in Auburn, the other on lands in Aurelius, in the county of Cayuga. Both mortgages were dated June 26th, 1838; one was recorded the same day, and the other on the 19th of July, 1838. The answer of C. B. Perry, the owner of the equity of redemption, set forth among other things, that the bond and mortgages were delivered on the 14th of July, 1838, when the consideration, (which, it was alleged, consisted of certain bonds, or evidences of debt of the company,) was advanced; although the bond and mortgages drew interest from June 26th. That therefore more than seven per cent. interest was reserved and taken, and the mortgages were usurious. That, by the second section of the charter of the complainants, it is enacted as follows: "That the said corporation shall have authority to make loans on the security of bonds and mortgages, or conveyances of improved farms, houses, manufactories, or other buildings, or on any other real estate." And that by the third section of the same act, it is amongst other things, enacted, "That any such loans on bonds and mortgages, or other securities on real estate, shall not be made payable in a shorter time than one year, and the interest payable annually; and the said corporation shall not foreclose any such mortgages or securities, until after the expiration of five years after the date of such mortgage. Provided, the interest thereon is punctually paid." That by the terms of the mortgages in question, the principal is made payable in a shorter time than one year from the time the pretended loan thereon was made; and the interest was required to be paid on the first of November next ensuing its date, and if it remained unpaid for thirty days, the whole principal thereupon became due. That the bond and mortgages were therefore taken and received by the company, contrary to the provisions of their charter; the company had no power or authority to receive the same, and they are utterly void in their hands, and cannot be enforced.

That by the twentieth and last section of the act, entitled "An act to incorporate The Farmers Fire Insurance and Loan Company," passed February 28th, 1822, and which is the same act by which The Farmers Loan and Trust Company was incorporated, it is enacted as follows: "And be it further enacted, that this act shall expire at the end of fifteen years from the time

The Farmers Loan and Trust Company v. Perry.

of its passage, except as to insurances upon lives, and of the granting of annuities. Provided, that all contracts previously made, shall be binding and obligatory." The defendant insisted. that the existence of the complainants' incorporation ceased, and its corporate powers became and were extinct, except for the purposes in the last above recited section stated, and the corporation had not on the day of the date of the bond and mortgages, or at any time afterwards, any power or authority whatever, to loan monies or evidences of debt, or to purchase bonds and mortgages, or engage in any business whatever, except as authorized by the last above recited section, either by its original charter, or by any act amending the same, or by any law of this state. For this reason also, the defendant insisted the bond and mortgages were absolutely null and void, in the hands of the complainants.

The answer set forth a prior mortgage on the lands in Aurelius, which had been assigned to, and was held by the defendant. The defendants, P. H. Perry and wife, put in an answer and disclaimer. The cause was heard on the pleadings and proofs.

The facts stated in C. B. Perry's answer, were admitted or proved, except as to the consideration of the mortgages, as to which it was proved to have been paid in the check of the company, on the 14th of July, 1838.

E. H. Ely, for the complainants, made the following points: I. The defendants are estopped from denying the powers of the complainants to make loans upon bond and mortgage, they having been parties to the contract. (Welland Canal Co. v. Hathaway, 8 Wend. 483.)

II. The charter of the Farmers Loan and Trust Company, by the original act of incorporation, and the acts amending the same, for all purposes of receiving, taking and executing any and all trusts, in the same manner, and to the same extent, as any trustee or trustees might or could lawfully do, and as to insurances upon lives, and of the granting of annuities, is unlimited and perpetual. (Act of incorporation, Laws of 1822, p. 47, ch. 50. Acts relating to, or amending the same, Laws of 1822, p. 254, ch. 240; Laws of 1836, p. 281, ch. 210.)

The Farmers Loan and Trust Company v. Perry.

III. The power of this corporation, in regard to the investment of its funds as trustees, is unlimited; only with this restriction, that the mode must be adopted in good faith, for the sole purpose of investments, and not with the view of carrying on any banking operation, or any traffic in stocks or goods, wares, and merchandise.

As trustees, they were bound to put out their money on mortgage. (1 J. C. R. 527, 620; 4 ibid. 619.)

IV. The power of this corporation, in regard to the investment of its capital, is general, except so far as it is in terms restricted by the original act of incorporation.

V. The bonds and mortgages are not, nor are any or either of them, void for usury, or for any other cause.

David Wright, for the defendant, C. B. Perry.

First. The bond and mortgage were executed, delivered and received, upon a usurious contract, and are therefore utterly void. Because, the loan was made July 14, 1838, and interest reserved from June 26, 1838.

Second. The principal secured to be paid by the bond and mortgage, is payable in less than one year from the time the loan was made, which is contrary to the express provisions of their charter. (Laws of 1822, p. 47, 2 and 3; The North River Insurance Co. v. Lawrence, 3 Wend. 482; The Life and Fire Insurance Co. v. The Mechanics Fire Insurance Co. of N. Y., 7 id. 31; Edwards v. Farmers Fire Insurance and Loan Co., 21 Wend. 492; Safford v. Wyckoff, 4 Hill, 447-8-per Chancellor; Head & Amory v. The Providence Insurance Co., 2 Cranch, 168; N. Y. Fire Insurance Co. v. Ely, 5 Conn. Rep. 560; Fox v. Horah, 1 Iredell's Eq. Rep. 358.)

Third. The interest upon this bond and mortgage is payable before the end of the year after the date thereof, and also before the end of the year after the time of the loan.

The bond and mortgage bear date June 26, 1838, the loan was in fact made July 14, 1838. Interest is made payable Nov. 1, 1838, less than four months from date of the loan, and less than five months from the date of the bond and mortgage, and annually thereafter. (Same authorities as to last point.)